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Author: Julius Cobbett

Date Published: 14 June 2012

Update: *responses from Momentum and the JSE MAP.

JOHANNESBURG – On the face of it, former hedge fund boss Herman Pretorius and his company, Abante, have delivered excellent returns for his investors – in the region of 20% a year for the past five years. This would rank him among the top money managers in the country.

Pretorius has an unknown number of relatively wealthy private investors. Those known to Moneyweb are typically from small farming towns such as Moorreesburg, Porterville, Hopefield, Malmesbury, Durbanville, Riversdale and Sasolburg.

But two financial advisers – whose clients have money invested with Pretorius – have asked whether his returns can be verified.

One financial adviser wrote to Moneyweb: “There are a number of red flags that go up for me with regards to Abante but nobody (as far as I know) has really scratched around.”

One of the biggest concerns for this adviser was the consistency of the investment performance. “Their performance is just too consistent. I am not aware of a single negative quarter for this fund. They seem to average anything from 20-30% per annum every year. Even through the global financial crisis.”

The investment, called Relative Value Arbitrage Fund (RVAF), also does not have the type of safeguards that apply to most hedge funds.

Pretorius is not licensed with the FSB and claims he is not required to do so. What’s more, the statements issued to investors are basic in the extreme. An example …..